U.S. homes lose $2 trillion in value in '08

more like: american homeowners grounded by reality in '08

The houses (sorry homeowners!) were wildly overpriced. It's a good thing that these prices are coming down. Very, very few of these homes listed at $500,000 are actually worth $500,000 in real terms. It reminds me of the Dot Com stock bubble. A lot of these companies werent really worth anywhere near what the stock was trading for and when the prices came back down to reality a lot of people lost a lot of money.

In Denver a one bedroom condo sitting in a rundown neighborhood across the street from a PAYDAY LOAN store, a Dollar Store and a Jiffy Lube commands over $600,000. The flyer will say "backs to goregous open space!" which turns out to be a narrow 10 ft strip of grass. And after the 10 ft strip of grass the property line for the junk yard starts.

$600,000! And thats after(!) they have "Reduced Price For Quick Sale!"

Soooo, no. Unfortunately these prices aren't at real world levels just yet.

Somewhere along the way housing prices became disconnected from reality.

Obviously the majority of these insane home prices was fueled by the mortgage industry approving everyone for $500,000 loans (no credit or employment necessary!)....but I also hold those damn home improvement/house flipping shows responsible too. They helped convince people that their homes were worth a lot more than they really were.

Those shows convinced people that if they simply bought $10 worth of paint and repainted their kitchen cabinets that simple "improvement" would justify pricing the home at $50,000 higher in value than what they bought it at. Or if they spent $2,000 on new tiles for the bathroom, then that should increase the resale value from $150,000 to $250,000.

And young homebuyers who didn't know any better (and who had inexplicably been approved for really, really high mortgages) thought it was all a great deal and bought it.

Sorry, repainting your kitchen is nice...but it just didn't really increase the resale value of your house by tens of thousands of dollars.

So, in essence, we're victims of ripping ourselves off too much?
Got it.

this problem isnt going to go away until they address the issue of- "you dont qualify for a decent loan with a monthly payment of $600, but you DO qualify for a loan with a $1200 monthly payment for the same house" because as long as you are ripping people off like that, eventually they will be tapped out....

Merry Christmas America...Capitalism has failed yet again...

thanks HGTV - you made us all think we could pimp out/flip homes and turn them quickly for profit! Little did most of America know that you were doing this all in Canada and the info was not really relevant to the U.S. market. . .

Why does this sound like pissing in the proverbial ocean at this point?

$700 billion to a handful of completely undeserving companies here, $50 billion 1-man pyramid scheme there...and suddenly 2 trillion divided across an entire nation doesn't sound like that much.

Perhaps we should start analyzing everything per capita and percentage-wise?

Yes housing values have too fall even further if I'm going to purchase one.

The bailout could have helped over a million families avoid foreclosure & ultimately eviction from their homes. So the banks now have their money & their properties I presume. This whole real estate fiasco could have been avoided IF the gov't had done their job enforcing regulations & overseeing the nation's financial health particularly with giant red flags waiving that we're heading for big trouble. It wouldn’t surprise me if our thieving gov’t took full advantage during the financial bailout to be sure the U.S. Treasury was completely cleaned out.